TaxTMI 
TaxTMI 
TaxTMI 
Revised and updated FTP, 2015-2020
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....TMENT OF COMMERCE सà¥à¤°à¥‡à¤¶ पà¥à¤°à¤à¥ SURESH PRABHU सतà¥à¤¯à¤®à¥‡à¤µ जयते वाणिजà¥à¤¯ à¤à¤µà¤‚ उदà¥à¤¯à¥‹à¤— मंतà¥à¤°à¥€ à¤à¤¾à¤°à¤¤ सरकार, नई दिलà¥à¤²à¥€ MINISTER OF COMMERCE & INDUSTRY GOVERNMENT OF INDIA, NEW DELHI सà¥à¤µà¤šà¥à¤› à¤à¤¾à¤°à¤¤ à¤à¤• कदम सà¥à¤µà¤šà¥à¤›à¤¤à¤¾ की ओर FOREWORD The mid-term review of the Foreign Trade Policy, 2015-20 provides an opportunity to make corrective changes as per the evolving global trade scenario and to align with the changes in the indirect taxes regime with the introduction of GST from 1st July 2017. The FTP-2015-20 launched on April 1, 2015 introduced a slew of measures by providing a framework for increasing exports of goods and services, generation of employment and increasing value addition, in keeping with the 'Make in India' vision of our Hon'ble Pr....
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....Rafi Marg, New Delhi-110011/ Tel. No. 91-11-23062223, 23061492, 23061008 Fax: 23062947 E-mail: [email protected] The MEIS Schedule has been constantly expanded and covers around 70% of tariff lines under ITS (HS) 2017. The MEIS rates have been further enhanced for Ready-made Garments, Agriculture products and select labour intensive and MSME products to provide a boost to exports and employment generation. To provide an impetus to the export of services, the SEIS rates have also been increased. The validity period of the Duty Credit Scrips has been changed from 18 months to 24 months to enhance their utility and attractiveness in the GST regime. To enable Ease of Trading across Border, support and hand-holding of exporters and review and simplification of procedures will be undertaken. A new duty exemption scheme with Self Declaration and Self Ratification has been introduced to allow duty free inputs for export production. India has also signed "Trade Facilitation Agreement' under World Trade Organisation and an Action Plan has been launched and its implementation is being monitored by a high level inter-ministerial committee. For faster rule-based processing, rel....
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....urvedi] Director General of Foreign Trade Email: [email protected] [Issued from File No. 01/94/180/332/AM15/PC4/Vol. II] Table of Contents CHAPTER 1 LEGAL FRAMEWORK AND TRADE FACILITATION 9 9 A. LEGAL FRAMEWORK 1.00 LEGAL BASIS OF FOREIGN TRADE POLICY (FTP) 9 1.01 DURATION OF FTP 9 1.02 AMENDMENT TO FTP 1.03 1.04 HAND BOOK OF PROCEDURES (HBP) AND APPENDICES & AAYAT NIRYAT FORMS (AANF) SPECIFIC PROVISION TO PREVAIL OVER THE GENERAL 9 1.05 TRANSITIONAL ARRANGEMENTS 10 B. TRADE FACILITATION&EASE OF DOING BUSINESS .10 1.06 OBJECTIVE 10 1.07 DGFT AS A FACILITATOR OF EXPORTS/IMPORTS 1.08 NIRYAT BANDHU - HAND HOLDING SCHEME FOR NEW EXPORT / IMPORT ENTREPRENEURS 1.09 CITIZEN'S CHARTER 1.10 ONLINE COMPLAINT REGISTRATION AND MONITORING SYSTEM 10 11 11 11 1.11 ISSUE OF E-IEC (ELECTRONIC-IMPORTER EXPORTER CODE) 1.12 E-BRC 11 12 1.13 1.14 MOU WITH STATE GOVERNMENTS FOR SHARING OF E-BRC DATA EXPORTER IMPORTER PROFILE 12 12 1.15 REDUCTION IN MANDATORY DOCUMENTS REQUIRED FOR EXPORT AND IMPORT 13 1.16 FACILITY OF ONLINE FILING OF APPLICATIONS 13 1.17 ONLINE INTER-MINISTERIAL CONSULTATION 13 1.18 1.19 FACILITY TO UPLOAD DOCUMENTS BY CA/ CS / COS....
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....IVIDUALS, GROUPS, UNDERTAKINGS AND ENTITIES ASSOCIATED WITH AL QAIDA 30 2.17 PROHIBITION ON DIRECT OR INDIRECT IMPORT AND EXPORT FROM/TO DPRK 2.18 DIRECT OR INDIRECT EXPORT/IMPORT TO/FROM IRAN 2.19 PROHIBITION ON IMPORT OF CHARCOAL FROM SOMALIA 2.20 STATE TRADING ENTERPRISES (STES) 31 31 32 32 2.21 TRADE WITH NEIGHBOURING COUNTRIES 2.22 TRANSIT FACILITY 2.23 TRADE WITH RUSSIA UNDER DEBT-REPAYMENT AGREEMENT 33 33 33 PASSENGER BAGGAGE - 2.24 IMPORT OF SAMPLES 2.25 IMPORT OF GIFTS 2.26 2.27 RE IMPORT OF GOODS REPAIRED ABROAD 2.28 33 33 33 34 IMPORT OF GOODS USED IN PROJECTS ABROAD 2.29 IMPORT OF PROTOTYPES 2.30 IMPORT THROUGH COURIER SERVICE/POST 2.31 SECOND HAND GOODS IMPORT POLICY FOR METALLIC WASTE AND SCRAPS: 34 34 35 35 .36 2.32 IMPORT OF METALLIC WASTE AND SCRAP 36 2.33 REMOVAL OF SCRAP/WASTE FROM SEZ 36 OTHER PROVISIONS RELATED TO IMPORTS:. .36 2.34 IMPORT UNDER LEASE FINANCING 36 2.35 2.36 2.37 EXECUTION OF Legal UNDERTAKING (LUT) / BANK GUARANTEE (BG) PRIVATE/PUBLIC BONDED WAREHOUSES FOR IMPORTS SPECIAL PROVISION FOR HIDES SKINS AND SEMI-FINISHED GOODS 37 37 37 2 2.38 SALE ON HIGH SEAS EXPORTS:.. 2.39 FREE E....
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....GRANT OF DOUBLE WEIGHTAGE 3.23 OTHER CONDITIONS FOR GRANT OF STATUS PRIVILEGES OF STATUS HOLDERS CHAPTER 4 DUTY EXEMPTION/REMISSION SCHEMES. 4.00 OBJECTIVE 58 58 59 59 .61 .......61 61 4.01 SCHEMES 61 4.02 4.03 APPLICABILITY OF POLICY & PROCEDURES ADVANCEAUTHORISATION 61 61 4.04 ADVANCE AUTHORISATION FOR Spices 62 4.05 ELIGIBLE APPLICANT / EXPORT / SUPPLY 63 4.06 ADVANCE AUTHORISATION FOR ANNUAL REQUIREMENT 64 4.07 ELIGIBILITY CONDITION TO OBTAIN ADVANCE AUTHORISATION FOR ANNUAL REQUIREMENT 4.07A SELF RATIFICATION SCHEME 64 64 4.08 VALUE ADDITION 67 4.09 MINIMUM VALUE ADDITION 67 4.10 IMPORT OF MANDATORY SPARES 68 4.11 INELIGIBLE CATEGORIES OF IMPORT ON SELF DECLARATION BASIS 68 4.12 ACCOUNTING OF INPUT 69 4.13 PRE-IMPORT CONDITION IN CERTAIN CASES 69 4.14 DETAILS OF DUTIES EXEMPTED 70 4.15 ADMISsibility of DRAWBACK 70 4.16 ACTUAL USER CONDITION FOR ADVANCE AUTHORISATION 70 4.18 4.19 FREE OF COST SUPPLY BY FOREIGN BUYER 4.20 DOMESTIC SOURCING OF INPUTS 4.21 CURRENCY FOR REALISATION OF EXPORT PROCEEDS. 4.17 VALIDITY PERIOD FOR IMPORT AND ITS EXTENSION IMPORTABILITY/EXPORT ABILITY OF ITEMS THAT ARE PROHIBITED/RESTRICTED....
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....) AND BIO-TECHNOLOGY PARKS (BTPS) INTRODUCTION AND OBJECTIVE .91 91 6.01 EXPORT AND IMPORT OF GOODS 91 6.02 SECOND HAND CAPITAL GOODS 94 6.03 LEASING OF CAPITAL GOODS 94 6.04 NET FOREIGN EXCHANGE EARNINGS 95 6.05 APPLICATIONS & APPROVALS/LETTER OF PERMISSION / LETTER OF INTENT AND LEGAL UNDERTAKING 95 6.06 INVESTMENT CRITERIA 96 6.07 APPLICATIONS & APPROVALS 96 5 6.09 6.10 EXPORT THROUGH OTHERS 6.11 ENTITLEMENT FOR SUPPLIES FROM THE DTA 6.12 OTHER ENTITLEMENTS 6.13 INTER UNIT TRANSFER 6.14 SUB-CONTRACTING 6.08 DTA SALe of Finished Products / REJECTS / WASTE/ SCRAP / REMNANTS AND BY-PRODUCTS 97 OTHER SUPPLIES 100 101 101 102 103 104 6.15 SALE OF UNUTilized MATERIAL 6.16 RECONDITIONING/REPAIR AND RE - ENGINEERING 106 107 6.17 REPLACEMENT / REPAIR OF IMPORTED / INDIGENOUS GOODS 107 6.18 EXIT FROM EOU SCHEME 108 6.19 CONVERSION 109 6.20 MONITORING OF NFE 109 6.21 EXPORT THROUGH EXHIBITIONS / EXPORT PROMOTION TOURS/SHOWROOMS ABROAD/DUTY FREE SHOPS 110 6.22 PERSONAL CARRIAGE OF IMPORT / EXPORT Parcels INCLUDING THROUGH FOREIGN BOUND PASSENGERS 110 6.23 EXPORT / IMPORT BY POST / COURIER 110 6.24 ADMINISTRATION OF EOUS /....
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....eserves the right to make any amendment to the FTP, by means of notification, in public interest. 1.03 Hand Book of Procedures (HBP) and Appendices & Aayat Niryat Forms (AANF) Director General of Foreign Trade (DGFT) may, by means of a Public Notice, notify Hand Book of Procedures, including Appendices and Aayat Niryat Forms or amendment thereto, if any, laying down the procedure to be followed by an exporter or importer or by any Licensing/Regional Authority or by any other authority for purposes of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and provisions of FTP. 1.04 Specific provision to prevail over the general Where a specific provision is spelt out in the FTP/Hand Book of Procedures (HBP), the same shall prevail over the general provision. 1.05 Transitional Arrangements (a) Any License / Authorisation / Certificate / Scrip / instrument bestowing financial or fiscal benefit issued before commencement of FTP, 2015-20 (as updated) w.e.f. 05.12.2017shall continue to be valid for the purpose and duration for which it was issued, such License/Authorisation/ Certificate / Scrip / any instrument bestowing financial or fisca....
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....h the help of Export Promotion Councils as ‘industry partners' and other willing 'knowledge partners' in academia and research community to achieve the objective of Niryat Bandhu Scheme. Further, in order to ensure optimum utilization of resources, efforts would be made to associate all the stakeholders, including Customs, ECGC, Banks and concerned Ministries. 1.09 Citizen's Charter DGFT has in place a Citizen's Charter, giving time schedules for providing various services to clients. Time line for disposal of an Application is given in Para 9.10 of HBP. 1.10 Online Complaint Registration and Monitoring System An EDI Help Desk is available to assist the exporters in filing online applications on the DGFT portal and resolving other EDI related issues. For assistance an email may be sent at [email protected] or Toll Free number 1800111550 can be used. Help Desk facility is also operational at the 4 DGFT Zonal Offices (details at http://dgft.gov.in). An Online Complaint registration and monitoring system allows users to register complaint and receive status/ reply online (details are at http://dgft.gov.in). 1.11 Issue of e-IEC (Electronic-Importer Exporter Code) ....
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....pplications in DGFT. 1.15 Reduction in mandatory documents required for Export and Import The number of mandatory documents required for exports and imports of goods from/into India have been reduced to three each, as prescribed under paragraph 2.06 of FTP. 1.16 Facility of online filing of applications All the Regional Authorities (RA) of DGFT and extension counters have been networked with high speed internet. The applications are received and processed electronically. DGFT under the EDI initiatives has provided the facility of on line filing of applications to obtain Importer Exporter Code and various Authorisations /scrip's. DGFT is one of the first digital signature enabled organisation of the Government of India (GOI), which has introduced a higher level of Encrypted 2048bit digital signature. There is a web interface for online filing of application after accessing DGFT website (http://dgft.gov.in). The application can be filed by exporter/CHA sitting at home or office in 24X7 environments. Application fee can also be paid online from linked banks or by using debit/credit card. The applications are signed with a digital signature and submitted electronicall....
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....s a significant measure in the direction of reduction of transaction cost. The endeavour of DGFT has been to enlarge the scope of EDI to achieve higher level of integration with partner departments. 1.20 Message Exchange with Community partners Customs, Banks, Export Promotion Councils (EPCs) are major community partners of DGFT for message exchange. An effective message exchange system is in place with various community partners which is as follows: (a) Message Exchange with Customs (i) Importer Exporter Code Number. (ii) Authorisations/Scrips for DFIA, AA, EPCG. (iii) Shipping Bills for Duty Free Import Authorisation (DFIA), Advance Authorisation (AA), Export Promotion Capital Goods (EPCG), Reward Scrips. 14 (b) Message Exchange with eBiz (https://www.ebiz.gov.in): Application for e-IEC. (c) Message Exchange with Banks (i) Application Fee (ii) electronic Bank Realisation Certificate (e-BRC) data (d) Message Exchange with EPCs Registration cum Membership Certificate (RCMC) data. (e) Message exchange with GSTN and RBI. 1.21 Encouraging development of Third Party API DGFT will encourage development of third party software for integration with its system t....
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.... Scheme include: a. Reduced Cost of doing business; b. Enhanced transparency; c. Reduced duplicity and cost of compliance; d. Optimal utilization of man power. 16 16 1.27 Self-Assessment of Customs Duty (a) Self-Assessment of Customs duty by importers or exporters was introduced vide Finance Act, 2011. The system is trust based. The objective is to expedite release of imported / export goods. The system operates on an electronic Risk Management System (RMS) (b) The Finance Act, 2017 has amended Section 47 of the Customs Act, 1962 to Authorize an importer to pay duty/tax/cess on the date of presentation of self-assessed Bill of Entry. 1.28 Authorised Economic Operator (AEO) Programme (a) Based upon WCO's SAFE Framework of Standards (FoS), 'Authorised Economic Operator (AEO) programme' has been developed by Indian Customs to enable business involved in the international trade to reap the following benefits: (b) (i) Secure supply chain from point of export to import; (ii) Ability to demonstrate compliance with security standards when contracting to supply overseas importers/exporters; (iii) Enhanced border clearance privileges in Mutual Recognition Agreement ....
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....e across all EDI ports/locations. 1.32 Exemption from Service Tax on Services received abroad (Deleted) 1.33 Export of perishable agricultural Products To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced. The system will involve creation of multi-functional nodal agencies to be accredited by Agricultural and Processed Food Products Export Development Authority (APEDA), New Delhi. The detailed procedure has been notified at Appendix 1C to Appendices & ANFs. 18 1.34 Time Release Study (TRS) Customs Authority has decided to undertake ‘Time Release Study' (TRS) as per WCO guidelines at major Customs locations on six monthly basis. WCO Time Release Study (TRS) is a unique tool and method for measuring the actual performance of Customs. The underlying objectives of Time Release Study are: (i) Identifying bottlenecks in the international supply chain / or constraints affecting Customs release. (ii) Establishing baseline trade facilitation performance measurement. 1.35 Towns of Export Excellence (TEE) (a) (b) (c) Objective: Development and growth of export production centr....
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....d Shipping Bills and Export Promotion copy of Shipping Bill. However, hard copy of EP copy of shipping Bill/ Bill of Entry may be provided on request only. 1.38 National Committee on Trade Facilitation (NCTF) Consequent to India's ratification of the WTO Agreement on Trade Facilitation (TFA) in April 2016, the National Committee on Trade Facilitation (NCTF) has been constituted. The establishment of the Committee is part of mandatory, institutional arrangement of the TFA. This inter-ministerial body on trade facilitation will be chaired by the Cabinet Secretary. Its Secretariat will be housed within the Central Board of Excise and Customs (CBEC), in the Directorate General of Export Promotion, New Delhi. The defined objective behind setting up the NCTF is to have national level body that will facilitate domestic co-ordination and implementation of TFA provisions. It will play the lead role in developing the Pan-India road map for trade facilitation. It will be instrumental in synergizing the various 20 20 trade facilitation perspectives across the country and will also focus on an outreach programmes for sensitization of all stakeholders about TFA. 1.39 e-mail in....
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....h Domestic Laws (a) Domestic Laws/ Rules/ Orders/ Regulations/ technical specifications/ environmental/safety and health norms applicable to domestically produced goods shall apply, mutatis mutandis, to imports, unless specifically exempted. (b) However, Goods to be utilized/ consumed in manufacture of export products, as notified by DGFT, may be exempted from domestic standards/ quality specifications. 2.04 Authority to specify Procedures DGFT may, specify Procedures to be followed by an exporter or importer or by any licensing/Regional Authority (RA) or by any other authority for purposes of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures, or amendments if any, shall be published by means of a Public Notice. Importer-Exporter Code/e-IEC 2.05 Importer-Exporter Code (IEC) 24 (I) An IEC is a 10-character alpha-numeric number allotted to a person that is mandatory for undertaking any export/import activities. With a view to maintain the unique identity of an entity (firm/company/LLP etc.), consequent upon introduction / implementation of GST, IEC will be equal to PAN and will be separately issued by DGFT....
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....ns/policy conditions or require NOC or product specific compliances under any statute, the regulatory authority concerned may notify additional documents for purposes of export or import. (d) In specific cases of export or import, the regulatory authority concerned may electronically or in writing seek additional documents or information, as deemed necessary to ensure legal compliance. 26 (e) The above stipulations are effective from 1st April, 2015. 2.07 Principles of Restrictions DGFT may, through a Notification, impose restrictions on export and import, necessary for: - (a) Protection of public morals; (b) Protection of human, animal or plant life or health; (c) Protection of patents, trademarks and copyrights, and the (d) prevention of deceptive practices; Prevention of use of prison labour; (e) Protection of national treasures of artistic, historic or (f) (g) (h) (i) archaeological value; Conservation of exhaustible natural resources; Protection of trade of fissionable material or material from which they are derived; Prevention of traffic in arms, ammunition and implements of war Relating to the importation or exportation of gold or silver. 2.0....
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....lso be cleared against an Authorisation issued subsequently. However, such goods already imported/shipped/arrived, in advance are first warehoused against Bill of Entry for Warehousing and then cleared for home consumption against an Authorisation issued subsequently. This facility will however be not available to “restricted†items or items traded through STEs. 2.14 Authorisation - not a Right No person can claim an Authorisation as a right and DGFT or RA shall have power to refuse to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there under and FTP. 2.15 Penal action and placing of an entity in Denied Entity List (DEL) a) If an Authorisation holder violates any condition of such Authorisation or fails to fulfill export obligation, or fails to deposit the requisite amount within the period specified in demand notice issued by Department of Revenue and /or DGFT, he shall be liable for action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and any other law for time being in force. b) With a view to raising ethical standards and for ease of doing business, DGFT has provided for self certif....
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....State in Iraq and the Levant [ISIL], Al Nusrah Front [ANF] and other individuals, groups, undertakings and entities associated, directly or indirectly, with Al Qaida. 2.17 Prohibition on direct or indirect import and export from/to DPRK Direct or Indirect export and import of items, whether or not originating in Democratic People's Republic of Korea (DPRK) to/from DPRK is detailed in Appendix - I of FTP. 2.18 Direct or Indirect Export/Import to/from Iran (a) Direct or indirect export to Iran or import from Iran of any item, material, equipment, goods and technology mentioned in the following documents would be permitted subject to the provisions contained in Annex-B to the United Nations Security Council Resolution 2231 (2015): (i) Items listed in INFCIRC/254/Rev.9/Part 1 and INFCIRC/254/Rev.7 /Part 2 (IAEA Documents) as updated by the IAEA from time to time. (ii) Items listed in S/2006/263 (UN Security Council document) as updated by the Security Council from time to time. (b) All the UN Security Council Resolutions/Documents and IAEA Documents referred to above are available on the UN Security Council website (www.un.org/Docs/sc) and IAEA website (www.iaea.org....
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....Samples Import of samples shall be governed by Para 2.65 of Handbook of Procedures. 2.25 Import of Gifts Import of gifts shall be ‘free' where such goods are otherwise freely importable under ITC (HS). In other cases, such imports shall be permitted against an Authorisation issued by DGFT. 2.26 Passenger Baggage 33 (a) (b) Bona-fide household goods and personal effects may be imported as part of passenger baggage as per limits, terms and conditions thereof in Baggage Rules notified by Ministry of Finance. Samples of such items that are otherwise freely importable under FTP may also be imported as part of passenger baggage without an Authorisation. (c) Exporters coming from abroad are also allowed to import drawings, patterns, labels, price tags, buttons, belts, trimming and embellishments required for export, as part of their passenger baggage without an Authorisation. 2.27 Re-import of goods repaired abroad Capital goods, equipments, components, parts and accessories, whether imported or indigenous, except those restricted under ITC (HS) may be sent abroad for repairs, testing, quality improvement or upgradation or standardization of technology and re....
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....rt in the shredded form; unshredded compressed and loose form is laid down in Para 2.54 of Handbook of Procedures. 2.33 Removal of Scrap/waste from SEZ A SEZ unit/Developer/ Co-developer may be allowed to dispose of in DTA any waste or scrap, including any form of metallic waste and scrap, generated during manufacturing or processing activity, without an Authorisation, on payment of applicable Customs Duty. Other Provisions Related to Imports: 2.34 Import under Lease Financing No specific permission of RA is required for lease financed capital goods. 36 2.35 Execution of Legal Undertaking (LUT) / Bank Guarantee (BG) (a) Wherever any duty free import is allowed or where otherwise specifically stated, importer shall execute, Legal Undertaking (LUT) / Bank Guarantee (BG) / Bond with the Customs Authority, as prescribed, before clearance of goods. (b) In case of indigenous sourcing, Authorisation holder shall furnish LUT/BG/Bond to RA concerned before sourcing material from indigenous supplier/nominated agency as prescribed in Chapter 2 of Handbook of Procedures. 2.36 Private/Public Bonded Warehouses for Imports (a) Private/ Public bonded warehouses may be set up ....
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....ng Rs.5,00,000/- in a licensing year, may be exported as a gift. However, items mentioned as restricted for exports in ITC (HS) shall not be exported as a gift, without an Authorisation. 2.45 Export of Passenger Baggage (a) Bona-fide personal baggage may be exported either along with passenger or, if unaccompanied, within one year before or after passenger's departure from India. However, items mentioned as restricted in ITC (HS) shall require an Authorisation. Government of India officials proceeding abroad on official postings shall, however, be permitted to carry along with their personal baggage, food items (free, restricted or prohibited) strictly for their personal consumption. The Provisions of the Para shall be subject to Baggage Rules issued under Customs Act, 1962. (b) Samples of such items that are otherwise freely exportable under FTP may also be exported as part of passenger baggage without an Authorisation. 2.46 Import for export I. (a) Goods imported, in accordance with FTP, may be exported in same or substantially the same form without an Authorisation provided that item to be imported or exported is not in the restricted for import or export in ....
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....ce/Post Exports through a registered courier service is permitted as per Notification issued by DoR. However, exportability of such items shall be regulated in accordance with FTP/ ITC (HS), 2017. 2.48 Export of Replacement Goods Goods or parts thereof on being exported and found defective/damaged or otherwise unfit for use may be replaced free of charge by the exporter and such goods shall be allowed for export by Customs authorities, provided that replacement goods are not mentioned as restricted/SCOMET items for exports in ITC (HS). If the export item is ‘restricted'/ under SCOMET, the exporter shall require a export license for replacement. 41 2.49 Export of Repaired Goods Goods or parts thereof, except restricted under ITC (HS), on being exported and found defective, damaged or otherwise unfit for use may be imported for repair and subsequent re-export. Such goods shall be allowed clearance without an Authorisation and in accordance with customs notification. To that extent the exporter shall return the benefits /incentive availed on the returned goods. If the item is 'restricted' for import, the exporter shall require an import license. However, re-e....
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.... may relax provisions of this paragraph in appropriate cases. Export contracts and invoices can be denominated in Indian rupees against EXIM Bank/Government of India line of credit. 2.53 Export to Iran -Realisations in Indian Rupees to be eligible for FTP benefits/ incentives Notwithstanding the provisions contained in para 2.52 (a) above, export proceeds realized in Indian Rupees against exports to Iran are permitted to 43 avail exports benefits / incentives under the Foreign Trade Policy (2015- 20), at par with export proceeds realized in freely convertible currency. 2.54 Non-Realisation of Export Proceeds (a) If an exporter fails to realize export proceeds within time specified by RBI, he shall, without prejudice to any liability or penalty under any law in force, be liable to return all benefits / incentives availed against such exports and action in accordance with provisions of FT (D&R) Act, Rules and Orders made there under and FTP. (b) In case an Exporter is unable to realize the export proceeds for reasons beyond his control (force-majeure), he may approach RBI for writing off the unrealised amount as laid down in Para 2.87 of Handbook of Procedures. (c....
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....to furnish or upload on DGFT's website in the Importer Exporter Profile, the RCMC granted by competent authority in accordance with Procedures specified in Handbook of Procedures unless specifically exempted under FTP. Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board and Certificate of Registration as 45 Exporter of coir & coir products issued by the Coir Board shall be treated as Registration-Cum-Membership Certificate (RCMC) for the purposes under this Policy. Policy Interpretation and Relaxations: 2.57 Interpretation of Policy (a) The decision of DGFT shall be final and binding on all matters relating to interpretation of Policy, or provision in Handbook of Procedures, Appendices and Aayat Niryat Forms or classification of any item for import / export in the ITC (HS). (b) A Policy Interpretation Committee (PIC) may be constituted to aid and advice DGFT. The composition of the PIC would be as follows: (i) (ii) (iii) DGFT: Chairman All Additional DGFTs in Headquarters: Members All Joint DGFTs in Headquarters looking after Policy matters: Members (iv) Joint DGFT (PRC/PIC): Member Secretary (v) Any other person / representati....
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....or Self Certification of Certificate of Origin. (i) Currently, Certificates of Origin under various Preferential Trade Agreements [PTA], Free Trade Agreements [FTAs], Comprehensive Economic Cooperation Agreements [CECA] and Comprehensive Economic Partnerships Agreements [CEPA] are issued by designated agencies as per Appendix 2B of Appendices and Aayat and Niryat Forms. A new optional system of self certification is being introduced with a view to reducing transaction cost. (ii) The Manufacturers who are also Status Holders shall be eligible for Approved Exporter Scheme. Approved Exporters will be entitled to self- certify their manufactured goods as originating from India with a view to qualifying for preferential treatment under different PTAS/FTAS/ CECAS/CEPAs which are in operation. Self-certification will be permitted only for the goods that are manufactured as per the Industrial Entrepreneurs Memorandum (IEM) / Industrial License (IL) /Letter of Intent (LOI) issued to manufacturers. (iii) Status Holders will be recognized by DGFT as Approved Exporters for self-certification based on availability of required infrastructure, capacity and trained manpower as p....
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....ppendix 3B also lists the rate(s) of rewards on various notified products [ITC (HS) code wise]. The basis of calculation of reward would be on realised FOB value of exports in free foreign exchange, or on FOB value of exports as given in the Shipping Bills in freely convertible foreign currencies, whichever is less, unless otherwise specified. 3.05 Export of goods through courier or foreign post offices using e- Commerce (i) Exports of goods through courier or foreign post office using e- commerce, as notified in Appendix 3C, of FOB value upto Rs. 25000 per consignment shall be entitled for rewards under MEIS. (ii) If the value of exports using e-commerce platform is more than Rs 25000 per consignment then MEIS reward would be limited to FOB value of Rs.25000 only. (iii) Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai. (iv) Export of such goods under Courier Regulations shall be allowed. manually on pilot basis through Airports at Delhi, Mumbai and Chennai as per appropriate amendments in regulations to be made by Department of Revenue. Department of Revenue shall fast track the implementation of EDI mode ....
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.... other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible. 3.10 Entitlement under SEIS Service Providers of eligible services shall be entitled to Duty Credit Scrip at notified rates (as given in Appendix 3D) on net foreign exchange earned. 3.11 Remittances through Credit Card and other instruments for MEIS and SEIS Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account for computation of value of exports. 3.12 Effective date of schemes (MEIS and SEIS) The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS/SEIS shall be admissible for exports made/services rendered on or after the date of notification of this Policy. 3.13 Special Provisions (a) (b) (c) (d) Government reserves the right in public interest, to specify export products or services o....
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....e company/ firm who has realized the foreign exchange directly from overseas. 55 55 3.18 Facility of payment of custom duties and fee through duty credit scrips (a) Duty Credit Scrip can be utilized / debited for payment of Custom Duties in case of EO defaults for Authorisations issued under Chapters 4 and 5 of Foreign Trade Policy. Such utilization /usage shall be in respect of those goods which are permitted to be imported under the respective reward schemes. However, penalty / interest shall be required to be paid in cash. (b) Duty credit scrips can also be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under Para 4.49 of HBP 2015-20. 3.19 Risk Management System (a) A Risk Management System shall be in operation whereby every month Computer system in DGFT Headquarters, on random basis and on the basis of guidelines issued by the DGFT from time to time, will select 10% of applications for each RA where scrips and Status Holder Certificates have already been issued, under each scheme. RA in turn may call for original documents in all such selected cases for further exa....
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.... export performance will be counted on the basis of FOB of export earning in freely convertible foreign currencies For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified by CBEC, as applicable on 1st April of each Financial Year. For granting status, export performance is necessary in at least two out of four years. 57 3.21 Status Category Status Category One Star Export House Two Star Export House Three Star Export House Four Star Export House Five Star Export House 3.22 Grant of Double Weightage (a) (b) (c) Export Performance FOB FOR (as converted) Value (in US $ million) 3 25 100 500 2000 The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status. (i) (ii) Micro, Small & Medium Enterprises (MSME) as defined in Micro, Small & Medium Enterprises Development (MSMED) Act 2006. Manufacturing units having ISO/BIS. (iii) Units located in North Eastern States including Sikkim and Jammu & Kashmir. (iv) Units located in Agri Export Zones. Double Weightage shall be available for grant of One Star Export ....
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....xtended to remaining Status Holders. Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per Para 2.108 (d) of Hand Book of Procedures. Status holders shall be entitled to export freely exportable items (excluding Gems and Jewellery, Articles of Gold and precious metals) on free of cost basis for export promotion subject to an annual limit of Rupees One Crore or 2% of average annual export realization during preceding three licensing years, whichever is lower. For export of pharma products by pharmaceutical companies, the annual limit would be 2% of the average annual export realisation during preceding three licensing years. In case of supplies of pharmaceutical products, vaccines and lifesaving drugs to health programmes of international agencies such as UN, WHO-PAHO and Government health programmes, the annual limit shall be upto 8% of the average annual export realisation during preceding three licensing years. Such free of cost supplies shall not be entitled to Duty Drawback or any other export incentive under any export promotion scheme 60 60 4.00 Objective CHAPTER 4 DUTY EXEMPTIO....
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....risation shall be issued for the import of relevant fabrics including inter lining only as input. No other input, packing material, fuel, oil and catalyst shall be allowed for import under this authorisation. 62 62 (iii) Exporters shall be eligible for All Industry Rate of Duty Drawback, for non fabric inputs, as determined by Central Government for this scheme. For the purpose of value addition norm of Para 4.08 of FTP, the value of any other input used on which benefit of Drawback is claimed or intended to be claimed shall be equal to 22% of the FOB value of export realised. Minimum value addition shall be as per Para 4.09 of FTP. (iv) Where the exporter desires to claim drawback determined and fixed by Jurisdictional Customs Authority (brand rate), he shall follow Para 4.15 of FTP regarding declarations to be made in application for the authorisation and make export under claim for brand rate. In such cases the value addition shall be as per Para 4.08 of FTP. Minimum value addition shall be as per Para 4.09 of FTP. (v) Authorisation, and the fabric imported, shall be subject to actual user condition. The same shall be non transferable even after completion....
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.... export and / or FOR value of deemed export in preceding financial year or Rs 1 crore, whichever is higher. 4.07A Self Ratification Scheme i. Where there is no SION/valid Adhoc Norms for an export product and where SION has been notified but exporter intends to use additional inputs in the manufacturing process, eligible exporter can apply for an Advance Authorisation under this scheme on self declaration and self ratification basis. RA may 64 ii. iii. iv. V. vi. issue Advance Authorisations and such cases need not be referred to Norms Committees for ratification of norms. Application under this scheme shall be made along with a Certificate from Chartered Engineer in the prescribed format. A Certificate from a Chartered Engineer who has been not been penalised in the last five years under FT(D&R) Act 1992, Customs Act 1962, Central Excise Act 1944, GST Acts and allied acts and rules made there under shall only be accepted for grant of Authorisation under this scheme. Detailed procedure for administering the scheme shall be prescribed in the Handbook of Procedures. An exporter (manufacturer or merchant) who holds AEO Certificate under Common Accreditation ....
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....pletion of the audit. Non-availability of production and consumption documents/data shall be treated as misdeclaration and indulgence in fraudulent activities and shall be penalised under FT(D&R) Act, as amended and rules made there under. X. DGFT or any person authorised by him may initiate special audit, considering the nature and complexity of the case and revenue of government, if he is of the opinion at any stage of scrutiny/enquiry/investigation that the norms have not been claimed correctly or the excess benefit has been availed. Special audit can be conducted even if the manufacturer has already been audited before. 66 xi. xii. xiii. If the audit results in detection of misdeclaration and/or instances of claiming of inputs which are not used in manufacturing process or excess quantity of inputs than consumed, demand and recovery actions will be initiated in addition to initiation of action against the authorisation holder, manufacturer and Chartered Engineer in terms of Foreign Trade Development and Regulation Act 1992 and/or Customs Act 1962, as amended and rules made there under. In cases where Chartered Engineer has not exercised due diligence o....
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...., perfumery compounds and various feed ingredients containing vitamins, no Authorisation shall be issued by Regional Authority under paragraph 4.07 of Handbook of Procedures and applicants shall be required to apply under paragraph 4.06 of Hand Book of Procedures to the Norms Committee. Where export and/or import of biotechnology items and related products are involved, Authorisation under paragraph 4.07 of Handbook of Procedures shall be issued by Regional Authority only 68 on submission of a “No Objection Certificate†from Department of Biotechnology. 4.12 Accounting of Input (i) Wherever SION permits use of either (a) a generic input or (b) alternative input, unless the name of the specific input together with quantity [which has been used in manufacturing the export product] gets indicated / endorsed in the relevant shipping bill and these inputs, so endorsed, within quantity specified and match the description in the relevant bill of entry, the concerned Authorisation will not be redeemed. In other words, the name/description of the input used (or to be used) in the Authorisation must match exactly with the name/description endorsed in the ship....
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....and Compensation Cess upto 31.03.2018 only. 4.15 Admissibility of Drawback Drawback as per rate determined and fixed by Customs authority in terms of DoR Rules shall be available for duty paid imported or indigenous inputs (not specified in the norms) used in the export product. For this purpose, applicant shall indicate clearly details of duty paid input in the application for Advance Authorisation. As per details mentioned in the application, Regional Authority shall also clearly endorse details of such duty paid inputs in the condition sheet of the Advance Authorisation. 4.16 Actual User Condition for Advance Authorisation (i) (ii) Advance Authorisation and / or material imported under Advance Authorisation shall be subject to 'Actual User' condition. The same shall not be transferable even after completion of export obligation. However, Authorisation holder will have option to dispose of product manufactured out of duty free input once export obligation is completed. In case where CENVAT/input tax credit facility on input has been availed for the exported goods, even after completion of export 70 obligation, the goods imported against such Advance Authoris....
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....nputs are supplied free of cost to exporter by foreign buyer. In such cases, notional value of free of cost input shall be added in the CIF value of import and FOB value of export for the purpose of computation of value addition. However, realization of export proceeds will be equivalent to an amount excluding notional value of such input. 4.20 Domestic Sourcing of Inputs (i) Holder of an Advance Authorisation / Duty Free Import Authorisation can procure inputs from indigenous supplier/ State Trading Enterprise/EOU/EHTP/BTP/STP in lieu of direct import. Such procurement can be against Advance Release Order (ARO), or Invalidation Letter. (ii) When domestic supplier intends to obtain duty free material for inputs through Advance Authorisation for supplying resultant product to another Advance Authorisation / DFIA / EPCG Authorisation, Regional Authority shall issue Invalidation Letter. (iii) Regional Authority shall issue Advance Release Order if the domestic supplier intends to seek refund of duties exempted through Deemed Exports mechanism as per provisions under Chapter-7 of FTP. (iv) Regional Authority may issue Advance Release Order or Invalidation Letter at ....
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....ms Duty (BCD). Deleted (iii) Drawback as per rate determined and fixed by Customs authority shall be available for duty paid inputs, whether imported or indigenous, used in the export product. However, in case such drawback is claimed for inputs not specified in SION, the applicant should have indicated clearly details of such duty paid inputs also in the application for Duty Free Import Authorisation, and as per the details mentioned in the application, the Regional Authority should also have clearly endorsed details of such duty paid inputs in the condition sheet of the Duty Free Import Authorisation. 4.27 Eligibility (i) Duty Free Import Authorisation shall be issued on post export basis for products for which Standard Input Output Norms have been notified. (ii) Merchant Exporter shall be required to mention name and address of supporting manufacturer of the export product on the export document viz. Shipping Bill/ Bill of Export / Tax Invoice for export prescribed under the GST rules. (iii) Application is to be filed with concerned Regional Authority before effecting export under Duty Free Import Authorisation. 74 (iv) No Duty Free Import Authorisation sha....
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....t of following inputs, exporter shall be required to provide declaration with regard to technical characteristics, quality and specification in Shipping Bill: "Alloy steel including Stainless Steel, Copper Alloy, Synthetic Rubber, Bearings, Solvent, Perfumes / Essential Oil/ Aromatic Chemicals, Surfactants, Relevant Fabrics, Marble, Articles made of Polypropylene, Articles made of Paper and Paper Board, Insecticides, Lead Ingots, Zinc Ingots, Citric Acid, Relevant Glass fibre reinforcement (Glass fibre, Chopped / Stranded Mat, Roving Woven Surfacing Mat), Relevant Synthetic Resin (unsaturated Polyester Resin, Epoxy Resin, Vinyl Ester Resin, Hydroxy Ethyl Cellulose), Lining Material". (b) While issuing Duty Free Import Authorisation, Regional Authority shall mention technical characteristics, quality and specification in respect of above inputs in the Authorisation. SCHEMES FOR EXPORTERS OF GEMSAND JEWELLERY 4.31 Import of Input Exporters of gems and Jewellery can import / procure duty free (excluding Integrated Tax and Compensation Cess leviable under Section 3(7) and 3(9) of customs Tariff Act) input for manufacture of export product. 4.32 Items of Export Foll....
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....Handbook of Procedures. 4.35 Replenishment Authorisation for Gems (i) Exporter may obtain Replenishment Authorisation for Gems from Regional Authority in accordance with procedure specified in Handbook of Procedures as per the replenishment rate prescribed in Appendix 4F. Replenishment Authorisation for Gems shall be freely transferable. (ii) Replenishment Authorisation for Gems may be issued against export including that made against supply by Nominated Agency (paragraph 4.41 of FTP) and against supply by foreign buyer (paragraph 4.45 of FTP). (iii) In the case of studded gold/silver/platinum jewellery and articles thereof, the value of Gem Replenishment Authorisation shall be on the remaining FOB value of exports after deducting the value of gold/ silver/ platinum including admissible wastage. The scale of replenishment and the item of import will be as prescribed in Appendix 4G. 4.36 Replenishment Authorisation for Consumables (i) Replenishment Authorisation for duty free (excluding Integrated Tax and Compensation cess leviable under Section 3(7) and 3(9) of Customs Tariff Act) import of Consumables, Tools and other items namely, Tags and labels, Security ....
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....not available Duty Free Import Authorisation scheme shall not be available for Gems and Jewellery sector. 4.41 Nominated Agencies (i) (ii) Exporters may obtain gold / silver / platinum from Nominated Agency. Exporter in EOU and units in SEZ would be governed by the respective provisions of Chapter-6 of FTP / SEZ Rules, respectively. Nominated Agencies are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited. (iii) Notwithstanding any provision relating to import of gold by Nominated Agencies under Foreign Trade Policy (2015-2020), the import of gold by Four Star and Five Star Houses with Nominated Agency Certificate is subjected to actual user condition and are permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate. (iv) Reserve Bank of India can authorize any bank as Nominated Agency. (iv) Procedure for import of precious metal by Nominated Agency (other than those authorized by Reserve Bank of India and the Gems & Jewellery units ....
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....t. (ii) Such supplies can also be in advance and may involve semi-finished jewellery including findings / mountings / components for repairs / re-make and export subject to minimum value addition as prescribed under paragraph 4.61 of Handbook of Procedures. In such cases of export, wastage norms as per paragraph 4.60 of Handbook of Procedures shall apply. (iii) Exports may be made by nominated agencies directly or through their associates or by status holder / exporter. Import and Export of findings shall be on net to net basis. 4.46 Export Promotion Tours/ Export of Branded Jewellery (i) Nominated Agencies and their associates, with approval of Department of Commerce and with approval of Gem & Jewellery Export Promotion Council (GJEPC), may export gold / silver / platinum jewellery and articles thereof for exhibitions abroad. (ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures. 4.47 Personal Carriage of Export/Import Parcels Personal carriage of gems and jewellery export parcels by foreign bound pas....
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....will also be counted towards discharge of his export obligation and/ or entitle him to replenishment Authorisation. 4.51 Export of cut & polished precious and semi-precious stones for treatment and re-import Gems and Jewellery exporters shall be allowed to export cut and polished precious and semi-precious stones for the treatment and re-import as per customs rules and regulations. In case of re-export, the exporter shall be entitled for duty drawback as per rules. 4.52 Re-import of rejected Jewellery Gems & Jewellery exporters shall be allowed to re-import rejected precious metal jewellery as per paragraph 4.91 of Handbook of Procedures. 4.53 Export and import on consignment basis Gems & Jewellery exporters shall be allowed to export and import diamond, gemstones & jewellery on consignment basis as per Handbook of Procedures and Customs Rules and Regulations. 84 CHAPTER 5 EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME 5.00 Objective The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and services and enhance India's manufacturing competitiveness. 5.01 EPCG Scheme (a) (b) (c) EPCG Scheme allows import of cap....
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.... service providers. Name of supporting manufacturer(s) shall be endorsed on the EPCG Authorisation before installation of the capital goods in the factory premises of the supporting manufacturer (s). In case of any change in supporting manufacturer (s) the RA shall intimate such change to jurisdictional Customs Authority of existing as well as changed supporting manufacturer(s) and the Customs at port of registration of Authorisation. Export Promotion Capital Goods (EPCG) Scheme also covers a service provider who is designated / certified as a Common Service Provider (CSP) by the DGFT, Department of Commerce or State Industrial Infrastructural Corporation in a Town of Export Excellence subject to provisions of Foreign Trade Policy/Handbook of Procedures with the following conditions:- 86 (i) Export by users of the common service, to be counted towards fulfillment of EO of the CSP shall contain the EPCG Authorisation details of the CSP in the respective Shipping bills and concerned RA must be informed about the details of the Users prior to such export; (ii) Such export will not count towards fulfillment of specific export obligations in respect of other EPCG Au....
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....for export of primary agricultural product(s) notified or their value added variants. 5.07 Indigenous Sourcing of Capital Goods and benefits to Domestic Supplier A person holding an EPCG authorisation may source capital goods from a domestic manufacturer. Such domestic manufacturer shall be eligible for deemed export benefits under paragraph 7.03 of FTP and as may be provided under GST Rules under the category of deemed exports. Such domestic sourcing shall also be permitted from EOUs and these supplies shall be counted for purpose of fulfilment of positive NFE by said EOU as provided in Para 6.09 (a) of FTP. 5.08 Calculation of Export Obligation In case of direct imports, EO shall be reckoned with reference to actual duty saved amount. In case of domestic sourcing, EO shall be reckoned with reference to notional Customs duties saved on FOR value. 88 88 5.09 Incentive for early EO fulfilment With a view to accelerating exports, in cases where Authorisation holder has fulfilled 75% or more of specific export obligation and 100% of Average Export Obligation till date, if any, in half or less than half the original export obligation period specified, remaining exp....
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....ing, aquaculture, animal husbandry, bio-technology, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture. Trading units are not covered under these schemes. (b) Objectives of these schemes are to promote exports, enhance foreign exchange earnings, attract investment for export production and employment generation. 6.01 Export and Import of Goods (a) (b) An EOU / EHTP / STP / BTP unit may export all kinds of goods and services except items that are prohibited in ITC (HS). However export of gold jewellery, including partly processed jewellery, whether plain or studded, and articles, containing gold of 8 carats and above upto a maximum limit of 22 carats only shall be permitted. Export of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) shall be subject to fulfilment of the conditions indicated in ITC (HS). In respect of an EOU, permission to export a prohibited item may be considered, by BOA, on a case to case basis, provided such raw materials are imported and there is no procurement of such raw material from DTA. 91 97 (c) Procurement and supply of export promotion material like brochure / literature, pam....
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....d)(ii) and 6.01(d)(iii) above, certain specified goods for creating a central facility. Software EOU/ DTA units may use such facility for export of software. An EOU engaged in agriculture, animal husbandry, aquaculture, floriculture, horticulture, pisciculture, viticulture, poultry or sericulture may be permitted to remove specified goods in connection with its activities for use outside the premises of the unit. Gems and jewellery EOUS may source gold / silver / platinum through nominated agencies on loan / outright purchase basis. Units obtaining gold / silver / platinum from nominated agencies, either on loan basis or outright purchase basis shall export gold / silver / platinum within 90 days from date of release. EOU / EHTP/STP / BTP units, other than service units, may export to Russian Federation in Indian Rupees against repayment of State Credit/ Escrow Rupee Account of buyer subject to RBI clearance, if any. Procurement and export of spares / components, upto 5% of FOB value of exports, may be allowed to same consignee / buyer of the export article, subject to the condition that it shall not count for NFE and direct tax benefits. BOA may allow, on a ca....
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.... Central Excise Act, 1944, and that the lien on the goods shall remain with the Customs Department, which will have first charge over the said goods for recovery of sum due from the 94 unit to Government under provision of Section 142(b) of the Customs Act, 1962 read with the Customs (Attachment of Property of Defaulters for Recovery of Govt. Dues) Rules, 1995. 6.04 Net Foreign Exchange Earnings EOU / EHTP / STP / BTP unit shall be a positive net foreign exchange earner. In addition sector specific provision of Appendix 6 B of Appendices & ANFS, where a higher value addition and other conditions are given, shall be required to be followed. NFE Earnings shall be calculated cumulatively in blocks of five years, starting from commencement of production. Whenever a unit is unable to achieve NFE due to prohibition / restriction imposed on export of any product mentioned in LoP, the five year block period for calculation of NFE earnings may be suitably extended by BoA. Further, wherever a unit is unable to achieve NFE due to adverse market condition or any grounds of genuine hardship having adverse impact on functioning of the unit, the five year block period for calcul....
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....A may allow establishment of EOUs with a lower investment criteria. 6.07 Applications & Approvals (a) Deleted (b) Deleted (c) Deleted (d) Deleted 96 96 6.08 DTA Sale of Finished Products / Rejects / Waste/ Scrap / Remnants and By-products Entire production of EOU/EHTP/STP/BTP units shall be exported. However, the following are allowed as exceptions subject to the conditions specified. (a) (i) Units, other than gems and jewellery units may sell finished goods manufactured by them as specified in LoP (including by- products, rejects, waste and scraps arising in the course of production, manufacture, processing or packaging of such goods) which are freely importable under FTP in DTA, subject to fulfillment of positive NFE, on payment of excise duty, if applicable, and/ or payment of GST and compensation cess along with reversal of duties of Custom leviable under First Schedule to the Customs Tariff Act, 1975 availed as exemption, if any on the inputs utilized for the purpose of manufacturing of such finished goods (including by-products, rejects, waste and scraps arising in the course of production, manufacture, processing or packaging of such goods). No DTA ....
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....edule of the Customs Tariff Act, 1975 availed as exemption, on inputs used in such jewellery. (d) Unless specifically prohibited in LoP, rejects may be sold in DTA on payment of excise duty, if applicable, and/or payment of GST and compensation cess along with reversal of duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975 availed as exemption on inputs on prior intimation to Customs authorities. Sale of rejects upto 5% of FOB value of exports shall not be subject to achievement of NFE. (e) Scrap / waste / remnants arising out of production process or in connection therewith may be sold in DTA, as per SION notified under Duty Exemption Scheme, on payment of applicable duties and/ or taxes and compensation cess. Such sales of scrap / waste / remnants shall not be subject to achievement of positive NFE. In respect of 98 (f) items not covered by norms, DC may fix ad- hoc norms for a period of six months and within this period, norms should be fixed by Norms Committee. Ad-hoc norms will continue till such time norms are fixed by Norms Committee. Scrap / waste / remnants may also be exported. There shall be no duties / taxes on scrap / ....
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.... or under section 65 of Customs Act and free trade and warehousing zones, where payment is received in foreign exchange. Supplies of goods and services to such organizations which are entitled for duty free import of such items in terms of general exemption notification issued by MoF, as may be provided in HBP. (g) Supplies of Information Technology Agreement (ITA-1) items and notified zero duty telecom / electronics items. Supplies of items like tags, labels, printed bags, stickers, belts, buttons or hangers to DTA unit for export. (h) Supply of LPG produced in an EOU refinery to Public Sector domestic oil companies for being supplied to household domestic consumers at subsidized prices under the Public Distribution System (PDS) Kerosene and Domestic LPG Subsidy Scheme, 2002, as notified by the Ministry of Petroleum and Natural Gas vide notification No. E- 100 20029/18/2001-PP dated 28.01.2003 (hereinafter referred to as PDS Scheme) subject to the following conditions:- (i) Only supply of such quantity of LPG would be eligible for which Ministry of Petroleum and Natural Gas declines permission for export and requires the LPG to be cleared in DTA; and (ii) Th....
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....d, during the preceding 3 years, on grounds other than procedural violations, under the penal provision of the Customs Act, the Central Excise Act, the Foreign Trade (Development & Regulation) Act, the Foreign Exchange Management Act, the Finance Act, 1994 covering Service Tax or any allied Acts or the rules made thereunder, on account of fraud / collusion / wilful 102 mis-statement / suppression of facts or contravention of any of the provisions thereof; 100% FDI investment permitted through automatic route similar to SEZ units. (e) (f) Deleted (g) The Units Approval Committee may consider on a case-to-case basis request for sharing of infrastructural facilities among EOUS and it shall forward its recommendation to the Board of Approval for its consideration. While accepting such proposals, the NFE obligations of the Units shall not be altered. Such facilities will be available to Units in EHTP/STP after getting approval from IMSC. However, sharing of facilities between EOUs and SEZ Units shall not be permitted. 6.13 Inter Unit Transfer (a) Transfer of manufactured goods from one EOU/EHTP/STP/BTP unit to another EOU / EHTP/ STP/ BTP unit is allowed on pay....
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.... of the supplier EOU. (d) In respect of a group of EOUS / EHTPS / STPs / BTP Units which source inputs centrally in order to obtain bulk discount and / or reduce cost of transportation and other logistics cost and / or to maintain effective supply chain, inter unit transfer of goods and services may be permitted on a case-to-case basis by the Unit Approval Committee. In case inputs so sourced are imported and then transferred to another unit, then value of the goods so transferred shall be taken as inflow for the unit transferring these goods and as outflow for the unit receiving these goods, for the purpose of calculation of Nfe. 6.14 Sub-Contracting (a) (i) EOU/EHTP/STP /BTP units, including gems and jewellery units, may on the basis of annual permission from Customs authorities, sub contract production processes to DTA - 104 (b) (i) (c) through job work which may also involve change of form or nature of goods, through job work by units in DTA. - (ii) These units may sub – contract upto 50% of overall production of previous year in value terms in DTA with permission of Customs authorities. EOU may, with annual permission from Customs authorities....
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....led, if any on the goods, at the time of import will also be payable and submission of import Authorisation; or (iii) Exported. Such transfer from EOU/EHTP/ STP/ BTP unit to another such unit would be treated as import for receiving unit. (b) Capital goods and spares that have become obsolete/ surplus, may be exported or transferred to SEZ unit, transferred to another EOU/EHTP/STP/BTP/on payment of applicable GST and compensation cessor disposed of in DTA on payment of applicable GST and compensation cess and duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975. Benefit of depreciation will be available in case of disposal in DTA only when the unit has achieved positive NFE taking into consideration the depreciation allowed. No duty shall be payable other than the applicable taxes under GST laws incase capital goods, raw material consumables, spares, goods manufactured, processed or packaged, and scrap/waste/remnants /rejects are destroyed within unit after intimation to Customs authorities or destroyed outside unit with permission of Customs authorities. Destruction as stated above shall not apply to gold, silver, platinum, diamond, p....
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....proval of DC, an EOU may opt out of scheme. Such exit shall be subject to payment of applicable Excise and Customs duties and on payment of applicable IGST/ CGST/ SGST/ UTGST and compensation cess, if any, and industrial policy in force. If unit has not achieved obligations, it shall also be liable to penalty at the time of exit. In the event of a gems and jewellery unit ceasing its operation, gold and other precious metals, alloys, gems and other materials available for manufacture of jewellery, shall be handed over to an agency nominated by DoC, at price to be determined by that agency. (d) An EOU EHTP / STP / BTP unit may also be permitted by DC to exit from the scheme at any time on payment of applicable duties and taxes and compensation cess on capital goods under the prevailing EPCG Scheme for DTA Units. This will be subject to fulfillment of positive NFE criteria under EOU scheme, eligibility criteria under EPCG scheme and standard conditions indicated in ÐÐ’Ð . (e) Unit proposing to exit out of EOU scheme shall intimate DC and Customs authorities in writing. Unit shall assess duty liability arising out of exit and submit details of such assessmen....
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....ng DTA units, having an investment of Rs. 50 crores and above in plant and machinery or exporting Rs. 50 crores and above annually, shall be placed before BOA for a decision. 6.20 Monitoring of NFE Performance of EOU/EHTP/STP/ BTP units shall be monitored by Units Approval Committee as per guidelines in HBP. 109 6.21 Export through Exhibitions / Export Promotion Tours/ Showrooms Abroad /Duty Free Shops EOU / EHTP/STP/BTP are permitted to: (i) Export goods for holding/participating in Exhibitions abroad with permission of DC. (ii) Personal carriage of gold / silver / platinum jewellery, precious, semi- precious stones, beads and articles. (iii) Export goods for display / sale in permitted shops set up abroad. (iv) Display sell in permitted shops set up abroad, or in showrooms of their distributors / agents. (v) Set up showrooms / retail outlets at International Airports. 6.22 Personal Carriage of Import / Export Parcels including through Foreign Bound Passengers Import/export through personal carriage of gems and jewellery items may be undertaken as per Customs procedure. However, export proceeds shall be realized through normal banking channel. Import/ export....
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....ified by Department of 113 Economic Affairs (DEA), MoF, where legal agreements provide for tender evaluation without including customs duty. (ii) Supply and installation of goods and equipment (single responsibility of turnkey contracts) to projects financed by multilateral or bilateral Agencies/Funds as notified by Department of Economic Affairs (DEA), MoF, for which bids have been invited and evaluated on the basis of Delivered Duty Paid (DDP) prices for goods manufactured abroad. (iii) Supplies covered in this paragraph shall be under International Competitive Bidding (ICB) in accordance with procedures of those Agencies / Funds. (iv) A list of agencies, covered under this paragraph, for deemed export benefits, is given in Appendix 7A. (f) (i) (g) Supply of goods to any project or for any purpose in respect of which the Ministry of Finance, by erstwhile Notification No. 12/2012 -Customs dated 17.3.2012, as amended from time to time, had permitted import of such goods at zero customs duty (with exemption of both BCD and CVD) subject to conditions specified therein and which are continued under the Customs Notification No. 50/2017-Customs dated 30.6.2017 wit....
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.... Deemed Export Drawback for BCD. (c) Refund of terminal excise duty for excisable goods mentioned in Schedule 4 of Central Excise Act 1944 provided the supply is eligible under that category of deemed exports and there is no exemption. 115 7.04 Benefits to the Supplier /Recipient applicable. Para 7.03 (a) Para 7.03 Categories Benefits on supplies, as given in Para 7.03 above, whichever is of supplies Para 7.03 (c) as per Advance (b) Para 7.02 Authorisation Duty Drawback Terminal Excise Duty (a) Yes Yes Yes (for inter (against ARO) mediate supplies against an invalidation letter) (b) Yes Yes Yes (c) Yes Yes ÎΑ (d) deleted deleted deleted (e) Yes Yes ÎΑ (f) Yes Yes Yes, only for para 7.08(iii)(a) (g) Yes Yes ÎΑ (h) Yes Yes ÎΑ 7.05 Conditions for refund of terminal excise duty (i) Supply of goods will be eligible for refund of terminal excise duty as per Para 7.03 (c) of FTP, provided recipient of goods does not avail CENVAT credit/rebate on such goods. (ii) Deleted (a) Deleted (b) Deleted (c) Deleted (d) Deleted 116 7.06 Conditions for refund of deemed export drawback Supplies will be....
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.... will be payable on delay in refund of duty drawback and terminal excise duty under the scheme, provided the claim is not settled within 30 days from the date of issue of final Approval Letter by RA. 7.10 Risk Management and Internal Audit mechanism (a) (b) A Risk Management system shall be in operation, wherein every month, Computer system in DGFT headquarters, on random basis, will select 10% of cases, for each RA, where benefit(s) under this chapter has/have already been granted. Such cases shall be scrutinized by an internal Audit team, headed by a Joint DGFT, in the office of respective Zonal Addl. DGFT. The team will be responsible to audit claims of not only for its own office but also the claims of all RAs falling under the jurisdiction of the Zone. The respective RA may also, either on the basis of report from Internal Audit/ External Audit Agency(ies) or suo-motu, reassess any case, where any erroneous/in-eligible payment has been made/claimed. RA will take necessary action for recovery of payment 118 along with interest at the rate of 15% per annum on the recoverable amount. 7.11 Penal Action In case, claim is filed by submitting mis-declaration/mi....
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....e of which the goods are being exported and shall subscribe a declaration of the truth of such statement at the foot of such Bill of Entry or Shipping Bill or any other documents. Violation of this provision renders the exporter liable for penal action. (b) Certain export commodities have been notified for Compulsory Quality Control & Pre-shipment Inspection prior to their export. Penal action can be taken under the Export (Quality Control & Inspection) Act, 1963 as amended in 1984, against exporters who do not conform to these standards and/ or provisions of the Act as laid down for such products. 8.03 Provisions in FT (D&R) Act & FT (Regulation) Rules for necessary action against erring exporters/ importers Action against erring exporters can be taken under the Foreign Trade (Development and Regulation) Act, 1992, as amended and under Foreign Trade (Regulation) Rules, 1993, as follows:- (a) (b) (c) (d) Section 8 of the Act empowers the Director General of Foreign Trade or any other person authorized by him to suspend or cancel the Importer Exporter Code Number for the reasons as given therein. Section 9 (2) of the Act empowers the Director General of Foreig....
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....ook of Procedures. 123 8.07 Corrective Measures The Committee at RA level can authorize the Export Inspection Agency or any technical authority to assess whether there has been any technical failure of not meeting the standards, manufacturing/ design defects, etc. for which complaints have been received. 8.08 Nodal Officer Director General of Foreign Trade would appoint an officer, not below the rank of Joint Director General, in the Headquarters, to function as the 'Nodal Officer' for coordinating with various Regional Authorities of DGFT. 124 9.01 CHAPTER 9 DEFINITIONS For purpose of FTP, unless context otherwise requires, the following words and expressions shall have the following meanings attached to them:- "Accessory" or "Attachment" means apart, sub-assembly or assembly that contributes to efficiency or effectiveness of a piece of equipment without changing its basic functions. 9.02 "Act" means Foreign Trade (Development and Regulation) Act, 1992 (No.22 of 1992) [FT (D&R) Act] as amended from time to time. 9.03 "Actual User" is a person (either natural & legal) who is authorized to use imported goods in his/its own premise which has a definitive p....
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....anufactured product is made up and into which it may be resolved. A component includes an accessory or attachment to another component. 9.11 9.12 "Consumables" means any item, which participates in or is required for a manufacturing process, but does not necessarily form part of end-product. Items, which are substantially or totally consumed during a manufacturing process, will be deemed to be consumables. "Consumer Goods" means any consumption goods, which can directly satisfy human needs without further processing and includes consumer durable sand accessories thereof. 9.13 "Counter Trade" means any arrangement under which exports/imports from /to India are balanced either by direct imports/exports from importing/exporting country or through a third country under a Trade Agreement or otherwise. Exports/Imports under Counter Trade may be carried out through Escrow Account, Buy Back arrangements, Barter trade or any similar arrangement. Balancing of exports and imports could wholly or partly be in cash, goods and/or services. 9.14 "Developer" means a person or body of persons, company, firm and such other private or government undertaking, who develops, bui....
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....8 "Jobbing" means processing or working upon of raw materials or semi-finished goods supplied to job worker, so as to complete a part of process resulting in manufacture or finishing of an article or any operation which is essential for aforesaid process. 9.29 "Licensing Year" meansperiodbeginningonthe1st April of a year and ending on the 31 March of the following year. st 9.30 "Managed Hotel" means hotels managed by a three star or above 129 hotel/hotel chain under an operating management contract for a duration of at least three years between operating hotel/ hotel chain and hotel being managed. Management contract must necessarily cover the entire gamut of operations/management of managed hotel. 9.31 "Manufacture" means to make, produce, fabricate, assemble, process or bring into existence, by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, re-packing, polishing, labelling, Re-conditioning repair, remaking, refurbishing, testing, calibration, re-engineering. Manufacture, for the purpose of FTP, shall also include agriculture, aquaculture, animal husbandry, floriculture, hor....
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....8 "Registration-Cum-Membership Certificate" (RCMC) means certificate of registration and membership granted by an Export Promotion Council/Commodity Board/Development Authority or other competent authority as prescribed in FTP or Handbook of Procedure. "Restricted" is a term indicating the import or export policy of an item, which can be imported into the country or exported outside, only after obtaining an Authorisation from the offices of DGFT. "Rules" means Rules made by Central Government under Section 19 of the FT (D&R) Act. 132 9.49 "SCOMET" is the nomenclature for dual use items of Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET). Export of dual-use items and technologies under India's Foreign Trade Policy is regulated. It is either prohibited or is permitted under an Authorisation. 9.50 "Services" include all tradable services covered under General Agreement on Trade in Services (GATS) and earning free foreign exchange. 9.51 9.52 9.53 "Service Provider" means a person providing: (i) Supply of a ‘service' from India to any other country; (Mode1- Cross border trade) (ii) Supply of a 'service' from India to servic....
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....5 Appendix I (Para 2.17) 2.17 Prohibition on direct or indirect import and export from/to Democratic People's Republic of Korea (DPRK) Prohibition on export: (A) The direct or indirect supply, sale, transfer or export of the following items to Democratic People's Republic of Korea (DPRK) is prohibited:- (i) any battle tanks, armoured combat vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems as defined for the purpose of the United Nations Register on Conventional Arms, or related materiel including spare parts; (ii) All arms and related materiel, including small arms and light weapons and their related materiel; (iii) all items, materials, equipment, goods and technology as set out in the UNSC United Nations Security Council and International Atomic Energy Agency (IAEA) documents, namely, 1. S/2006/853*; 2. S/2006/853/Corr.1; 3. Part B of S/2009/364; 4. Annex III of Resolution 2094 (2013); 5. S/2016/1069; 6. Annex A to INFCIRC/254/Rev.12/Part1 (IAEA document); 7. Annex to INFCIRC/254/Rev.9/Part2 (IAEA document); 8. S/2014/253; 9. S/2016/308; 10. Annex III of Resolution 2321 (2016); and 11.....
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.... and procedures set out in paragraph 9 of Resolution 2371 (2017); (vi) Lead and lead ore. This measure is subject to the exemptions and procedures set out in paragraph 10 of Resolution 2371 (2017); (vii) Textiles (including but not limited to fabrics and partially or fully completed apparel products). This measure is subject to the exemptions and procedures set out in paragraph 16 of Resolution 2375 (2017); Explanation.- a) b) c) UNSC means the United Nations Security Council; IAEA means the International Atomic Energy Agency; Committee means the Committee of the UNSC set up in terms of paragraph 12 of Resolution 1718 (2006); and Resolution, as the case may be, means the UNSC Resolutions under Chapter VII of the Charter of the United Nations on Democratic People's Republic of Korea, namely, 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2094 (2013), 2270 (2016), 2231 (2016), 2356 (2017), 2371 (2017) and 2375 (2017). 138 139 Acronym GLOSSARY (ACRONYMS) Explanation ACU AEZ ANF ARE-1 ARE-3 ACP AEO AA AANF Advance Authorisation Appendices and Aayaat Niryat Form Asian Clearing Union Agri Export Zone Aayat Niryaat Form Application for Removal ....
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....emission Schemes Domestic Tariff Area Electronic Bank Realisation Certificate Electronic Importer-Exporter Code Enforcement-cum-Adjudication Electronic Data Interchange Export Credit Guarantee Corporation Exchange Earners' Foreign Currency Exim Facilitation Committee Electronic Fund Transfer Export General Manifest Electronic Hardware Technology Park 141 EIC ЕО EODC ЕОРEOU EPC EPCG EPO EXIM FDI FE FEMA FIEO FIRC FOB FOR FT(D&R)Act FTDO FTP FT(R) FTWZ FTA G&J EPC GOI GATS GR HACCP HBP HHEC ICB ICD ICM IEC ISO IAEA INFCIRC IEM IMSC IL ISO ITC (HS) Export Inspection Council Export Obligation Export Obligation Discharge Certificate Export Obligation Period Export Oriented Unit Export Promotion Council Export Promotion Capital Goods Engineering Process Outsourcing Export Import Foreign Direct Investment Foreign Exchange Foreign Exchange Management Act Federation of Indian Export Organisation Foreign Exchange Inward Remittance Certificate Free On Board Freight on Road and Rails Foreign Trade ( Development & Regulation) Act, 1992 (22 of 1992) Foreign Trade Development Officer Foreign Trade Policy R....